Nowadays, ordering food from food delivery platforms or apps has become quite common. People quickly order and get their favorite dish. Now users may find it cheaper to order food from food delivery platforms or apps. GST Council could be a reason behind this.
Actually, it is believed that platforms like Zomato and Swiggy are expected to get relief. GST Council may bring good news for food delivery platforms like Zomato and Swiggy. Many reports have come out in this regard. The report says that there may be a cut in GST for food delivery platforms.
According to CNBC TV 18 report, the council may reduce GST on food delivery charges to 5 percent. Currently it comes under 18 percent tax slab. The council meeting is scheduled to be held on Saturday, December 21 in Jaisalmer, Rajasthan and the decision can be announced then. According to the report, the tax cut will be applicable retrospectively from January 1, 2022. However, there is a caveat to all this. The tax reduction means that food delivery companies will no longer be eligible to claim input tax credit while filing GST. But still this is a big demand fulfilled by the government as the industry is demanding to be brought at par with restaurants in terms of GST rates.
zomato on tax notice
Recently Zomato was served a tax notice to pay tax and penalty of around Rs 804 crore for the period 2019-22. So will now the claim be settled by CGST officials in Thane, Maharashtra.Even if the proposed tax cut is implemented, it will be applicable only to the last three months of the period under consideration as it is proposed to be implemented only from January 1, 2022. Therefore there is little or no relief for the food delivery company in this regard.
As far as benefits to consumers are concerned, it is unlikely to be effective as not being able to avail input tax credit (ITC) could mean that companies may have to pay more taxes in some cases. . All eyes will be on the council meeting to be held on Saturday for some more clarity on this subject.
